The Covid-19 pandemic highlighted the importance of the healthcare sector. More specifically, the pandemic showed the role of key players (startups, biotechs, & pharma) focused on infectious diseases in developing novel treatments and preventive solutions.
Most of the technology companies able to serve this purpose are deploying every possible resource to tackle the COVID-19 challenge. To this cause, a considerable financial support has been released from governments, European agencies and private funding.
But what about healthcare & life science startups not positioned on COVID 19? How can they survive in this context of unprecedented economic crisis?
Since the pandemic forced many countries to shut down, the survival of small biotechs and startups not involved in the Covid-19 fight has been threatened. These early-stage companies strongly rely on daily operational lab work. They need to be able to generate results and develop prototypes to convince capital ventures and shareholders to invest in their project.
To overcome the economic crisis following the pandemic, startups will need to rethink their strategy and revisit their priorities. Depending on their development stage, different approaches can be adopted to secure survival and plan sustainability.
Two distinct stages will be covered in this article:
- Pre-commercial start ups focused on development
- Commercial start-ups ready to sell or currently selling their products
Figure 1: Positioning when market studies and business development support are required in a startup lifecycle
Companies at pre-commercial stage: How to deal with the economic crisis? A time for market investigation
Why market research is important for start-ups?
The significant reduction of lab work slowed the progression of on-going product/service development.
Following R&D, startups should focus on building-up their technology into a marketable product or service. This critical step requires an initial visualization of the end-product and a clear understanding of the end-users needs impacted by the economical situation.
In the light of the current circumstances, putting into action a clear roadmap as well as evaluating the post-Covid19 market situation can be investigated through targeted market research, allowing to:
- Guide the strategic thinking for a successful crisis-exit action-plan
- Speed up future market entry by probing the market segments of interest
- Initiate new contact to establish partnerships and reference sites for future technology evaluation
- Better steer the product development towards end-user needs and prepare for commercial stage.
How market research can help start-ups get back on track after the crisis?
One of the key to success for start-ups consist of developing a marketable product. To reach this goal, important questions must be raised before and during the development phase, in order to avoid falling into the common trap of “no market need”. This reason has been outlined as the first reason for failure by 42% of startups evaluated in a 2017 Forbes study. It is therefore essential to understand: What problem will your product/technology solve? What are the user needs and pain points? What are the existing alternatives? What are the market trends? How is competition performing and what are the gaps?
It is the right time for start-ups to redesign their strategy based on how Covid-19 has impacted the market needs and habits of futur customers.
A focused market research is thus crucial to:
- Define the market segments to target & prioritize the applications of interest
- Map the competitive landscape and position the technology
- Analyze the end-users needs, expectations & purchase behavior by interviewing Key Opinion Leaders, experts & users
- Evaluate the market dynamics & the latest trends
- Establish a successful Go-To-Market strategy to ensure a better market access
Companies at commercial stage : How to fuel the customer pipeline after Covid-19? A time for innovative & smart commercial strategies
What are the current main challenges facing start-ups with ready-to-sell product/service?
At commercial stage, life science start-ups & biotech, especially new market entrants, have to build the commercial pipeline to generate revenue and establish reference sites.
During the pandemic, Covid-19 security measures have put business on hold. On-site conferences and exhibitions have been cancelled or postponed, preventing the identification of new prospects. Moreover, absence of face-to face meetings, seminars, or technology demonstrations in addition to budget cuts are slowing down the sales processes and impacting the purchasing decisions in 2020.
This temporary situation will have a direct impact on the business in the short and medium term. Therefore, the yearly sales targets should be re-evaluated and conventional sales methods should be re-invented.
Digital marketing, for instance, will allow the generation of new leads, but it is far from being enough to generate interest, and drive the purchase of innovative products.
How to reinvent the sales process for an efficient crisis recovery ?
It is important to adapt the methodologies to fill the prospect pipeline with new leads.
A business development support (cf: Fig n°2) will ensure the rapid implementation of new sales approaches adapted to the Covid situation and help start-ups prepare for a boosted recovery. A smart commercial strategy should include:
- Implementation of innovative digital tools
- Development of targeted digital campaigns
- Identification of qualified leads
- Setting-up online meetings for technology presentation
- Orchestrating webinars and online demonstrations
Through these activities, commercial support can compensate for the lack of face-to-face interaction and help build a strong pipeline of leads. The approach will drive market expansion by:
- Initiating entry in new geographies
- Launching a new product line or an existing product in a new market
- Developing and maintaining the commercial pipeline to accelerate the sales process in the post-Covid 19
- Conducting meetings and demo remotely
- Concluding sales and increasing revenue generation
Figure 2: Key steps of market study and business development processes leading to tangible startup achievements
It is time for new business strategies
This unprecedented situation represents a unique opportunity to review the strategy of your company and its priorities. Faced with a highly disrupted economy, agility is one of the keys to reinvent the way start-ups conduct businesses.
For pre-commercial start-ups, it is time to better define the target markets and specify the end-users needs. These elements are crucial to prioritize and steer the post-Covid products/service development and adapt the Go-To-Market strategy.
For commercial start-ups , it is important to build up the commercial pipeline in the absence of on-site conference and meetings to ensure reaching 2020 sales target. Companies should shift traditional marketing processes towards digital-based methods and adapt to the new post-covid market practices. This will make their sales approach more effective and increase revenue generation in the years to come.
With more than 14 years of business consulting in the industry, Novoptim has acquired start-up experience and supported the implementation of transformative strategies for their clients. As a consulting firm specialized in establishing market presence in Europe, Novoptim is available to help life science start-ups & biotechs face their current challenges and speed-up their market access and client acquisition.
Authors: Vincent Crave, Racha Fayad, Roxane Valfort